What Does an Underwriting Analyst Do?

An underwriting analyst evaluates both individuals and businesses to determine the degree of risk they present to lenders and insurers. Particularly for large or complex loans and insurance products, using an analyst can be critical to reduce risk and offer products appropriate to the needs of the customer. Work in this field may require a college degree as well as industry experience, depending on the employer. It can also help to belong to a professional organization that provides career development opportunities.

When clients approach a lender or insurance firm, the underwriting analyst can undertake research to determine the degree of risk presented. This includes looking over financial statements, requesting credit history, and evaluating other personal factors. In addition, the overall market can be considered. A manufacturer looking for a loan to initiate development of a new product might be a poor risk if the industry is struggling, for example, because it might not be able to pay off the loan. All these issues must be weighed when making decisions about which products the client might be eligible for.

This may result in a complete and detailed report with recommendations. The underwriting analyst can discuss the level of risk and provide some comparisons for the benefit of those reviewing the report. Recommendations, including the type of insurance or loan to offer and the terms, are typically included. Underwriting analysts can consider a variety of factors when advising personnel on whether to proceed with an offer of services.

A thorough understanding of statistics, risk management, and actuarial processes can be useful for an underwriting analyst. It is necessary to consider the individual profile of a person or company applying for a loan or insurance coverage along with market conditions and industry standards. Regulatory compliance can be a concern as well, such as stipulations limiting loans on the basis of annual income. Standards periodically change, making it important to keep up with industry practices to provide the best services to employers.

Someone preparing to become an underwriting analyst may get a degree in math, business, or accounting. This can be followed with several years in underwriting departments to get direct experience and knowledge of the industry. Senior positions usually require at least two years of experience and a degree. Employers may have continuing education expectations for their personnel. Some may provide assistance with the costs for conference attendance, subscribing to professional publications, and related career development activities.

An underwriting analyst is a professional who evaluates businesses and individuals to determine what type of credit risk they pose to insurers or lenders. Analysts are particularly helpful when it comes to determining who is worthy of large loans or complex insurance products. To determine risk, underwriting analysts utilize considerable amounts of research. They are often tasked with examining financial statements, evaluating personal factors, and requesting the credit history of a particular person or business. They will also take the market in general into consideration when performing evaluations.

After completing their research, underwriting analysts typically present their findings and opinions in a detailed report. The report usually provides details regarding a person or business’s degree of risk as well as what type of loan or insurance product should be offered.

To get a job as an underwriting analyst, you will need to perfect your resume. Employers will expect to see certain skills listed so they know you are a good fit for the job. As an analyst, you will definitely want to showcase your ability to understand concepts related to risk management, statistics, and actuarial processes. To distinguish yourself from other candidates, you must highlight your technical proficiency as much as possible. You should list your professional skills in a separate section on your resume.

To work as an underwriting analyst, you need to have experience using certain software programs. List your experience related to programs such as Six Sigma, Microsoft Excel, Adobe, Quality Control, and Rational Unified Process. Soft skills will be immensely important as well, so don’t be afraid to list skills related to time management, organization, working with others, and attention to detail.

Becoming an underwriter will require you to pursue higher education and gain real-world work experience. In most cases, anyone interested in becoming an underwriting analyst will need to obtain a degree in business, math, or accounting from an accredited four-year university. During their studies, they will need to take courses such as statistics, calculus, and basic accounting. Senior positions, however, may require a master’s degree in one of the previously mentioned fields.

To gain an entry-level position, you typically won’t need much experience unless you have worked as an intern before. Senior positions may require at least two years of direct experience working as an underwriting analyst. Depending on your employer, you may be expected to continue your education while you work. If this is required by your employer, you may provide you with some form of cost assistance for your education.

Underwriting analysts will also need to be open to learning for the rest of their careers since industry regulations periodically change.

The average salary for an underwriting analyst in the United States is $59,988 per year. Although the national average is near $60,000, there are numerous variables that impact how much an underwriting analyst will make. The company that employs you will have a strong impact on how much you pay since some companies pay significantly more than others. Geographic location is also important, especially since salaries in urban areas tend to be considerably more than salaries in rural areas. New York City currently offers the highest salaries to underwriting analysts.

Experience also has an impact on how much a person will make. The more experience you have as an underwriting analyst, the higher your salary will be in general. Your salary will also be higher if you are hired for a supervisory or managerial role.

Underwriting analysts can obtain a variety of professional certifications, which can increase employment opportunities and help them develop their skills. Currently, the American Institute for Chartered Property Casualty Underwriters offers two such courses, as does the American College. The American Institute for Chartered Property Casualty Underwriters offers both an Associate in Personal Insurance and an Associate in Commercial Underwriting. The American College’s two certification programs are the Chartered Life Underwriter and the Registered Health Underwriter.

Only underwriting analysts with at least two years of paid experience are eligible for either program. Candidates will also be required to complete a professional conduct and ethics module as part of the overall certification process.

Underwriting analysts are hired predominately by the insurance and banking industries. However, there are many other types of companies willing to hire underwriting analysts as employees. Private financial companies, such as investment banks, often hire underwriting analysts. Real estate lending companies are also in frequent need of underwriting analysts.

Applications for insurance are evaluated for risk by an underwriting analyst, who then recommends whether or not to accept the applications. They look at a number of things, including as the applicant's work, lifestyle choices, and past insurance claims. They also check that each application complies with the appropriate requirements by going through the company's underwriting policies. They give a recommendation to either accept or refuse the application after they have finished their study.

You need to have excellent analytical abilities and attention to detail to work as an underwriting analyst. To successfully convey your ideas to the underwriting team, you also need to have great communication skills. It also helps to be familiar with insurance regulations and medical jargon.

A bachelor's degree in a related discipline, such as finance, business administration, or insurance, is often required by employers. Certain businesses could additionally need a master's degree or underwriter certification. In terms of instruction, new recruits are often given on-the-job training to acquaint them with the company's rules and processes.

What are the career prospects for underwriting analysts?

In the coming years, there will likely be a greater requirement for insurance coverage, which will increase the need for underwriting analysts. Underwriting managers, product managers, and risk management specialists are higher-level jobs that underwriting analysts might achieve in the insurance sector. Also, they have the option of diversifying into subjects like actuarial science, financial analysis, or data analysis.

What credentials are required to become an underwriting analyst?

Typically, you require a bachelor's degree in business, finance, or economics to work as an underwriting analyst. Also, people with expertise in underwriting, risk assessment, or financial analysis are often sought after by companies. Good communication, problem-solving, and analytical abilities are also essential, as is the capacity to function successfully in a group setting. The Chartered Property Casualty Underwriter (CPCU) qualification, which displays a degree of skill in underwriting and risk management, is one certification that certain companies could also demand. Success as an underwriting analyst also depends on continuing education and remaining current with business trends and laws.